Anna Bernasek is the author of The Economics of Integrity: From Darwin to Toyota, How Wealth Is Based on Trust & What That Means for Our Future, published in 2010 by harperstudio, an imprint of Harper Collins. In Chapter 6, she shares an especially interesting account of a crisis and how the company founder resolved it.
About 100 years ago, Leon Leonwood Bean had a passion for the outdoors and “imagined how satisfying it would be to have a hunting shoe that kept his feet warm and dry when he was deep in the Maine woods.” After searching without success to find such a shoe, he decided to design one himself that was essentially made by sewing rugged leather uppers to rubber bottoms. In 1912, he came upon a list of nonresident Maine hunting license holders and contacted them with a flyer that promoted The Maine Hunting Shoe. “We guarantee them to give perfect satisfaction in every way.” That guarantee nearly ended the company. Alas, through no fault of his, 90 of the first 100 pairs sold were returned because stitching created leaks that resulted in cold, wet feet.
“True to his word, Bean borrowed money to return the payment for all ninety pairs of shoes. It was a humbling lesson but it didn’t stop him. Bean went about fixing the problem and sent out more flyers. That was the beginning of L.L. Bean, one of America’s most successful family businesses and a household name.”
A business crisis such as this does not develop integrity, it reveals it.